USD / CHF retraces from highs, still bullish around 0.9065-70 region

• USD / CHF gained positive traction on Friday and broke a three-day losing streak.
• The optimism of the COVID-19 vaccine weighed on the CHF safe haven and remained supportive.
• The weaker USD kept any significant gains capped, justifying bullish traders’ caution.

The pair USD/CHF It maintained its positive tone during the first North American session, although it fell around 10-15 pips from the 0.9080 region, or the daily highs touched in the last hour.

The pair managed to find some support near 0.9050 and made a modest recovery from the three-week lows on the final day of the week. The rally helped the USD / CHF pair break three consecutive days of the losing streak and was supported by the prevailing optimistic market climate.

Global risk sentiment remained well supported by recent optimism about the development of a possible vaccine for the highly contagious coronavirus disease. This was evident by a rally in equity markets, which undermined demand for the safe haven Swiss franc.

However, the prevailing selling bias around the US dollar kept any significant rally for the USD / CHF in check. Concerns about the economic consequences of the new COVID-19 restrictions in several US states reignited hopes for more stimulus from the incoming Biden administration.

This, coupled with a new leg to the downside in US Treasury yields, kept USD bulls on the defensive for most of Friday’s trading action. This makes it prudent to wait for a few subsequent purchases before positioning for any further appreciation moves.

There is no major market moving economic data that needs to be released in the U.S. Therefore, broader market risk sentiment, along with USD price dynamics, will continue to influence USD / CHF and will help traders seize some significant opportunities.

Technical levels